{"id":7037506,"date":"2026-08-11T04:34:28","date_gmt":"2026-08-11T04:34:28","guid":{"rendered":"https:\/\/peraltafinancing.com\/accounting\/electric-company-car-vs-private-car\/"},"modified":"2026-08-11T04:34:28","modified_gmt":"2026-08-11T04:34:28","slug":"electric-company-car-vs-private-car","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=7037506","title":{"rendered":"Electric Company Car vs Private Car?"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<section class=\"hero-block ratio-7-2\" style=\"--desktop-bg: url('https:\/\/pillowmay.co.uk\/wp-content\/uploads\/2026\/05\/Pink-Teslas-4-1024x768-1-e1626262543490-aspect-ratio-7-2.jpg'); --mobile-bg: url('https:\/\/pillowmay.co.uk\/wp-content\/uploads\/2026\/05\/Pink-Teslas-4-1024x768-1-e1626262543490-aspect-ratio-1-1.jpg');\">\n<p><h2 class=\"caveat\">\nCompany Electric Car            <\/h2>\n<\/p>\n<\/section>\n<h3 class=\"pm-heading m-b-40\">\nIs it better to buy a car privately or through your company?    <\/h3>\n<p class=\"wp-block-paragraph\"><strong>Is it worth having an electric company car?<\/strong><\/p>\n<p class=\"wp-block-paragraph\">Having a company car seems like an attractive proposition. But is it? Buying your own car privately or leasing could work out cheaper.<\/p>\n<p>Explore all the options below before making your decision.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Privately owned car<\/strong><\/p>\n<p class=\"wp-block-paragraph\">You would own the car personally and then claim 55p per mile back from the company for any business trips you make. (55p per mile for the first 10,000 miles per tax year and then 25p per mile thereafter)<br \/>These mileage repayments would not impact your personal tax position. The mileage payments are an allowable expense for corporation tax, so this would reduce your corporation tax bill.<br \/>No VAT can be claimed on this mileage payment as electricity is not considered fuel for these purposes.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Buying a car through the company<\/strong><br \/>You would have to pay personal income tax on the benefit in kind. The benefit in kind is worked out by applying a percentage to the list price of the car. The percentages confirmed so far are; 4% for 2026\u201127; 5% for 2027\u201128; 7% for 2028\u201129 and 9% for 2029\u201130 tax years.<\/p>\n<p class=\"wp-block-paragraph\">For example, if you purchased a Tesla electric car with a list price of \u00a359,000, you would pay 4%, so \u00a32,360 for the tax year 2026\u201127 (59,000 \u00d7 4%).<\/p>\n<p class=\"wp-block-paragraph\">The company can provide a charging point both at work and home and no benefit in kind would arise even if some of the charge is used for private miles. If you use your personal electricity to charge the car for business mileage, you can reimburse yourself \u2013 please see the<a href=\"https:\/\/pillowmay.co.uk\/current-advisory-fuel-rates\/\"> fuel advisory<\/a> page for the most up\u2011to\u2011date rates. If you can measure the electricity used to charge your car then a direct claim can be made from the company for home electric costs.<\/p>\n<p class=\"wp-block-paragraph\">All company\u2011car running costs such as maintenance and insurance can be paid through the company and VAT reclaimed as appropriate. Your company should be named as the car owner with the DVLA.<\/p>\n<p class=\"wp-block-paragraph\">From a company point of view, the car would be eligible for first\u2011year allowances for corporation tax purposes at 100% of the cost price (provided the car is brand new and unused or a demonstrator). You would depreciate the car in the accounts over its expected useful life.<\/p>\n<p class=\"wp-block-paragraph\">However, there is a sting in the tail: when you sell the car you will pay tax on 100% of the proceeds. It\u2019s important to note that 25% rate applies to companies with profits over \u00a3250,000. Smaller companies may still benefit from the small profits rate of 19%, depending on their taxable profit levels.<\/p>\n<p class=\"wp-block-paragraph\">The company would also pay Class 1A (15% for the 2026\u201127 tax year) on the benefit calculated, but this is treated as an allowable expense for corporation tax so in essence the company would pay 11.25% (15% \u00d7 75%). For the example given here, the cost to the company would be \u00a3199.13 (\u00a31,1770 \u00d7 11.25%).<\/p>\n<p class=\"wp-block-paragraph\">If you are a VAT\u2011registered business and the car will be used some of the time for personal use, you will not be able to reclaim any VAT on the purchase price.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Leasing a car through the company<\/strong><\/p>\n<p class=\"wp-block-paragraph\">If you lease the car and the company owns the car at the end of the lease (for example, hire purchase), the rules are the same as for buying the car through the company above.<\/p>\n<p class=\"wp-block-paragraph\">If you only lease the car for a certain number of years and then give it back, the car will not be an asset in the company.<\/p>\n<p class=\"wp-block-paragraph\">The monthly lease payments will be treated as any other company expense and will reduce your corporation tax by 19%\u201326.5% depending on your taxable company profits for the year.<\/p>\n<p class=\"wp-block-paragraph\">The tax implications for you personally will be the same as above (benefit in kind).<\/p>\n<p class=\"wp-block-paragraph\">If you are a VAT\u2011registered business and you take the car under an operating lease, you can reclaim 50% of the VAT charged.<\/p>\n<p class=\"wp-block-paragraph\">If the company takes out a hire purchase or PCP loan then it is effectively purchasing the car outright for tax purposes.<\/p>\n<p class=\"wp-block-paragraph\"><strong>Summary<\/strong><\/p>\n<p class=\"wp-block-paragraph\">At the moment, whilst the benefit\u2011in\u2011kind rules are so low, it\u2019s generally very worthwhile to have an electric company car \u2013 a major living expense that the company can pay so that your net personal income from the company can be used for more exciting things!<\/p>\n<p class=\"wp-block-paragraph\">The decision whether to purchase the car outright or lease it needs to suit your personal and business situations, considering matters such as how long you expect to keep the car, flexibility, business cash\u2011flow and financing cost.<\/p>\n<p class=\"wp-block-paragraph\">If you\u2019re still unsure which option is best for you, please don\u2019t hesitate to give us a call.<\/p>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Company Electric Car Is it better to buy a car privately or through your company? Is it worth having an electric company car? Having a company car seems like an attractive proposition. But is it? Buying your own car privately or leasing could work out cheaper. Explore all the options below before making your decision. [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7037507,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11759],"tags":[1075,3619,1380,11448],"dealstore":[],"offerexpiration":[],"class_list":["post-7037506","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting","tag-car","tag-company","tag-electric","tag-private"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Electric Company Car vs Private Car? - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=7037506\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Electric Company Car vs Private Car? - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"Company Electric Car Is it better to buy a car privately or through your company? 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